A Positive Shock to Spending Will Shift the Aggregate Demand

question 229

True/False

A positive shock to spending will shift the aggregate demand curve to the right and increase output in the short run,but not in the long run.

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Definitions:

Straight Line Amortization

A method for calculating the periodic reduction in the carrying amount of an intangible asset, spreading the cost evenly over its useful life.

Par Value Bonds

Bonds issued with a fixed face value that is to be repaid at maturity, often different from their market value.

Impairment Loss

The amount by which the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, necessitating a write-down to reflect the reduced value.

Intercompany Bond Sale

Transactions involving the sale of bonds between companies that are part of the same corporate group.